If the Inflation Rate in Canada Is Greater Than the Inflation

question 33

Multiple Choice

If the inflation rate in Canada is greater than the inflation rate in Britain,other things held constant,what will happen to the British pound?

• A)It will appreciate against the Canadian dollar.
• B)It will depreciate against the Canadian dollar.
• C)It will remain unchanged against the Canadian dollar.
• D)It will appreciate against other major currencies.

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Definitions:

Dollar Amount

The dollar amount refers to a monetary value expressed in units of currency, particularly in dollars.

Cumulative Preferred Stock

A type of preferred stock where dividends accumulate if not paid in a given year, and must be paid out before any dividends on common stock.

Capital Stock

The amount of shares that a company's shareholders have purchased and own, representing ownership in the company.

Dividend

A share of the profits paid to shareholders of a corporation, usually distributed in cash or additional stocks.